LyrArc Article Gist
Excellent article on GM and how it lost of market share in the coastal regions of the eastern, western and southern United States. Uses Miami as an example, and traces the large demographic changes there that GM failed to keep up with in its marketing. Describes the failures of corporate strategy in centralization of marketing and advertising, and the effects of the silos in decisionmaking at GM offices in the Detroit Rennaissance Center. Hawkins describes the four Renn Center towers as resembling massive steel grain silos. Just getting to an office in another tower requires taking an elevator to the ground floor , making it along a long walkway to another tower elevator. GM once ran a snow ad in Florida, and market share in South Florida is only 13.8%. The first ads to Hispanics were in 1995 and used the Alamo as a backdrop even though Mexicans make up only a small part of the Hispanic population there. The situation is repeated in other coastal cities of the U.S. - centralization of advertising and marketing, a sense at Detroit head offices that they knew what to do and did not have to ask people in the regional offices, a failure to delegate decisionmaking to regional offices and to people more attuned to the customer preferences for that demographic. A former Avon employee who marketed Avon products to Hispanics in South Florida is the new GM marketing executive in Florida. A regional sales manager for GM's southeast region says the organization is becoming flatter and for the first time he can talk directly with head offices in Detroit. ...

LyrArc Article Gist
World leaders including president Obama attend the funeral of Israel's former president Shimon Peres. He is known for negotiating the Oslo Peace Accords in 1994. He was a protege of prime minister Ben Gurion, and has served as prime minister, defense minister and foreign minister, and been part of the Israel's key events since independence in 1948. President Obama  said the work of Shimon Peres remains unfinished. "Now this work is in the hands of Israel's next generation, in the hands of Israel's next generation and its friends." In the years following the 1994 accords the peace process went astray, and trust has not been restored.

LyrArc Article Gist
Spencer Jakab provides this balanced perspective on Buffett's performance as an investor. Breaking the past 25 years into five periods gives a sense of how Buffett has fared in recent years compared to his performance in the early years. In the latest period since 2010 Berkshire stock has outperformed the market by a mere 0.9% annually. In the period 1995-1999 Berkshire performance trailed the S&P 500 significantly, making up for this in the next 5 years. As Berkshire became larger it was harder to generate results of the period around 1975. In that year returns were 129.3%. In 2015 Berkshire had to take big stakes in large companies such as Kraft. Gains for 2009 were 2.7%, 2010 21.4%, and 2011 minus 4.7%. Showing that Buffett's principles and approach remained intact- invest in what you know and be careful to respect what you don't know, invest in companies and their prospects for the long run (an option not easily available to mutual fund managers who are judged yearly), invest in companies generating large cash flows. Yet as Jakab points out performance has gradually declined over the years....

LyrArc Article Gist
P&G 's focus on premium priced brands is questioned as being the right strategy at a time when private label brands are putting pressure on suppliers for lower prices.

LyrArc Article Gist
Here is the answer to how retailing is doing in February 2009. See the graph. By type of store, Discount stores have held up with 2.9% increase, drug 1.6% decrease, Apparel 5.5% decrease, Department stroes 9% decrease. Of the discounters Walmart is up 5.1%, Target is down 4.1%; of Department stores Macy's down 8.5%, Penneys 8.8%, Saks and Neiman Marcus down 26 and 21%; and in Apparel stores Gap is down 12%, Abercrombie and Fitch down 30%, and Aerospatiale up 11%.

LyrArc Article Gist
Its time for trains says Stuart Braun in DW.com, with all the flight cancellations and hardships of plane travel these days. Don't forget he says that trains make up only a tiny 0.4% of the total transport carbon emissions in European Union- planes produce 10 times that- and provide a better alternative to flying. 

Right now only 7% of passenger transport is by train. A lot needs to be done including making travel seamless across Europe. Banning short haul flights is one way. High speed trains connecting all European cities is another. The 150 busiest flight routes across Europe can be done by trains. Studies show 81 million passengers could shift to trains with high speed rail connections making the time comparable to flying including airport travel and waiting time. Train companies and infrastructure is too nationalistic to meet the challenge of climate change and action is needed immediately.

LyrArc Article Gist
Jens Thurau talks about the chaos in Germany during this wave of the coronavirus in DW.com, and asks who is to blame- Merkel? The deniers? German behaviour sticking to rules? Lack of digitization technology culture? 

A German man 3 days short of his 60th birthday is turned away from a vaccination center because Astra Zeneca vaccine can only be given to persons above 60 years. The man is sent away starting a heated discussion at the vaccination center whether this was the right thing to do. He is ironically sent way because he is too young. Common sense has not prevailed.

Elsewhere local rules that are set down to the streets and house numbers where masks must be worn have been written down and followed. And deniers seem to think they have gone through enough hardships, when Italy and other countries have gone through much worse. German angst, he asks?

 

LyrArc Article Gist
Inflation slows to 3.2% for October 2023, and decelerates from 3.7% in the prior month. Moderate energy prices contributed, so did lower used car prices and lower airline fares. It is also broad based decline which makes it sustainable. Biden says- "I am fighting every single day for lowering costs to hardworking families." It reduces the pressure on the Fed to raise interest rates further. Inflation in food, bakery products and fruits and vegetables was 0.2 percent and apartment rental at 0.5 percent, electricity at 0.3% making it truly broadbased. This points to major progress on inflation, that adds to gains in low unemployment that have not been seen for decades. Wage gains for workers after the UAW agreement are spreading to other companies and industries which provides cost of living relief for workers and families across the 51 states for 2024. Lowering inflation and increasing suppressed wages is the way out of the cost of living crisis facing Americans. ...

LyrArc Article Gist
As the related article in The Washington Post points out the narrative inside India relates more to the the sense that terrorism has been a persistent problem for India and the public's sense that action was needed. Most of the issues in South Asia relate to development, roads, dams, bridges, airports and housing that need to be built, healthcare, sanitation and education on a massive scale. This is an area where India can show the way forward for South Asia, and be the real test for Mr. Modi after the many projects that he has initiated in India in the first term. It is only ordinary Indians, Pakistanis, Bangladeshis, Sri Lankans, and other people in South Asia that are paying the price for neglect of development and infrastructure as China, South Korea and other nations have forged ahead. A focus on development is the right sphere for competition both for Mr. Modi and for people in the region.

LyrArc Article Gist
Decades of investment in infrastructure and manufacturing have given China a strong grip on manufacturing. China's economy depends on exports with sluggish domestic demand. One economist in Hong Kong says Vietnam is the key, if tariffs are placed on Vietnam it will be tough he says, because Chinese goods enter the US from third countries.

In 2025 China's world trade is imbalanced to an extraordinarily large degree, hurting thriving manufacturing communities around the world, and depends on a concentration of port logistics, manufacturing and lack of fair trade practices, that allow $3.5 trillion in exports while taking in only $2.5 trillion in imports. By 2008 America was waking up to this, DJT actually flagged it a decade later, Biden realized this, in the second term what appears like a whirlwind 100 days is really action on many fronts that is coming one to two decades late. 

LyrArc Article Gist
Senator Edward Kennedy turned a close election around with an ad in 1994 attacking Romney for job cuts. The result was a 58% to 41% defeat for Romney. In Iowa a Perry ad presses this issue saying "Mr Romney made millions buying companies and laying off workers."

LyrArc Article Gist
This editorial by the Washington Post says private equity taking risks on troubled firms is Capitalism 101, and fulfills the role of "creative destruction" in capitalism as it functions in the American system as compared to the European system. It says private equity's gains in its investments are taxed as "carried interest," at a lower rate than ordinary income, and this needs to be changed so that government does not favor private equity investments.

LyrArc Article Gist
The risks to the Romney campaign in the U.S. Republican primaries after his work at Bain Capital comes under scrutiny. In the 1994 Senate election in Massachusetts Senator Edward Kennedy defeated Romney by focussing on the loss of jobs at companies acquired by Bain Capital. Kennedy's television advertising showed employees at Ampad who lost their jobs after a takeover by Bain Capital. A study by Stephen Davis of the University of Chicago, John Haltiwinger of the University of Maryland, Jos Lerner of Harvard, Ron Jarmin and John Miranda of the Census Bureau; looks at 3,200 buyouts between 1982 and 2005. It shows private equity firms shrinking the number of employees by about 6% more than other firms in the first 5 years. It also shows the firms largely offsetting the job losses through the firms that succeed and are expanded with new employees. This study does not look at a longer time frame. A recent examination of buyouts by Bain Capital over an eight year period by the Wall Street Journal gives a better picture because some of the firms went into bankruptcy during the 8-10 year time frame. Many of the jobs added are in the retail sector with lower wage levels- at Sports Authority, Staples, Toys R' Us, and Michael's for Bain Capital. ...

LyrArc Article Gist
The Federal Reserve acts to help freexzing credit markets with a $200 billion program called the Term Securities Lending Facility, where the Fed will lend safe treasury money such as Treasury securities for 28 days to banks and financial institutions and will accept nongovernment mortgage backed securities with premium credit ratings as collateral. Its a creative move by the Fed and the size of the move $200 billion should help the cash squeeze that is hitting all parts of the credit markets even those where the risks may not be as high as they are presumed to be because in this market with lack of information on who owns what of risky securities and the complexity of the securties all credit is being maligned.

LyrArc Article Gist
Leaders of North Korea and South Korea, Kim Jong-Un and Moon Jae-in meet on April 27, 2018, at the military demarcation line between North and South Korea.  After handshakes and Mr. Moon stepping onto North Korean soil for a few minutes, Kim Jong-Un visits Seoul for peace talks.  This is a historic moment for the two countries as this is the first time since the Korean War (1950-53) that a North Korean leader has visited the South. No peace treaty was signed after the Korean War. During the period of six decades that followed the Korean War, particularly the period after 1980, the South Korean economy recovered from the war and expanded following the Japanese export model with large conglomerates such as Samsung. The North Korean economy has struggled in the period and North Korea is one of the poorest countries isolated for most of this period like Burma from the rest of the world. The development of nuclear weapons was pursued to prevent any external threats to the government, and decades of sanctions followed with aborted efforts to denuclearize the Korean peninsula. Recent ballistic nuclear tests and the installation of a new anti missile system in South Korea led to tighter sanctions with the cooperation of China. This heightened tensions, followed by the tighter sanctions. Kim Jong Un and the government are looking for ways to win approval in the international community, and find a way out of the tight sanctions. South Korea, Japan and the U.S. government are not sure whether this will lead to any results in denuclearization. The summit with Moon will be followed by a summit between president Trump and Kim Jong Un of North Korea. If a way can be found for the North Korean government and party leaders to transition to acceptance in the international community followed by integration of the North and South's economies over an extended period, there is a possibility that denuclearization could work, because it is to maintain the current government in North Korea that nuclear development was pursued in the North. Ideological conflict is now less of a factor in the conflict between North and South Korea as it was in the early days of the Korean War with the Cold War and Communism's advances in Eastern Europe and Asia the big issue at the time. Today China itself is more of a state run economy under the Communist Party following capitalism with Chinese characteristics than the old Communist model, and ideological conflict is not an issue between the U.S. and Communist run countries. This leaves open the possibility of a solution particularly as at some point just as in the case of Vietnam and the U.S., North Korea could see its future more allied with that of South Korea than with China. That leaves an opening for a timetable of transitional actions plus effective implementation stages, with incentives for the U.S. and Japan to negotiate a settlement. ...

LyrArc Article Gist
A three term Congressman from Kansas, Mike Pompeo, is the new CIA director in the Trump adminsitration. He is a graduate of West Point, and of Harvard Law School. During the Benghazi hearings Pompeo played an important role as a member of the House Intelligence Committee. He questioned the handling of the Benghazi embassy attack by the Obama administration, saying one thing publicly and another thing privately as the election approached in 2012. The top Democrat on the committee, Adam Schiff, says he had differences with Pompeo on the politicization of the Benghazi tragedy, but that Pompeo worked hard and is willing to "listen and engage" with others.

LyrArc Article Gist
How Saturn is finding itself and trying to refocus its image and reach out to loyal customers. Efforts in ads that failed and the redesign thats working a lot better. See the way Saturn is redesigning its showrooms by not looking at competitors but looking at how Apple has redefined the retail experience in its stores that are a leader in this area with customers flocking to Apple stores. This is innovative approach of Saturn. See the slide show on this in the Sept 3, BW, on Saturn's new redesign of its showroom experience.